Social Return on Investment (SROI)

Abstract

The Social Return on Investment (SROI) is a method for measuring social outputs and valuing social outcomes in monetary terms (Boyd, 2004). The basic assumption underlying this technique is that every kind of business or organization (enterprises, private businesses, public body, charitable organizations and others) has an impact on people, society and environment. This impact can be strictly ‘economical’, but also ‘social’ and ‘environmental’. The SROI technique, however, speaks of ‘social impact’ referring generally to all aforesaid three kinds of impacts. The value to be measured by means of SROI Analysis is an added value. Then it does not consider the social value that would occur even without the social action of the entities considered, but only that one directly or indirectly due to that activity. The aim of this analysis is that of improving planning (looking forward) as well as evaluating (looking back) and of communicating social impact of entities to the stakeholders (either internal or external) interested in this kind of information. The SROI, even if born for ‘third sector’ organizations, is now employed in other kinds of private and public organizations, and then fully embedded in a Corporate Social Responsibility discourse.